Pagers' Sophistication Keeps Sales Growing

Low cost and versatility stop beepers from losing customers to cellular phones

THE pager has grown up. Not long ago, pagers (or beepers as they are commonly called) did only one thing: They sat on their owner's belt and sounded a tone, alerting the wearer to get to a telephone and return a call.

Pagers still do that, but now they are smaller and lighter, come in less-than-conservative colors, and can be worn as a wristwatch. The most popular pagers, numeric pagers, have small screens that display up to 20 digits of type. Pagers also play back recorded voice messages or display much longer typed messages.

Soon some high-end business users will be able to communicate back and forth with their pagers, without using a phone at all. And already beepers can be used as wireless data transmitters, dumping pages of text to PCs and laptops without a modem, according to the Paging Services Council in Washington.

Some analysts anticipated that the paging industry, which has been in existence 40 years, would be eliminated with the advent of cellular products.

"Quite the opposite," says Elliott Hamilton, vice president of Economic and Management Consultants International (EMCI) in Washington, which specializes in wireless communication technologies. "Pagers compliment cellular services. About 25 percent of cellular users have pagers too." Pagers less expensive

Since cellular phone users have to pay for incoming calls, many find it more cost-effective to receive a message on their dsffafdpager and return the call if they want to from their cellular phone. Pagers are relatively inexpensive (the average monthly cost is $12 to $23 for a rented pager; $100 to purchase a no-frills beeper with an average service fee of $11 to $17) and smaller and lighter than cellular phones.

Cost-effectiveness has helped pagers stay afloat in an increasingly competitive communications market. "It's a chicken and egg thing," Mr. Hamilton says. "More subscribers mean more manufacturers, more competition, lower prices, and therefore more subscribers." EMCI projects that revenues in the pager industry will increase more than 15 percent annually over the next few years.

The paging business brought in $2.2 billion in revenue last year, says Thomas Stroup, president of Telocator, an association for the personal communications industry in Washington. He says he expects the industry to grow 25 percent in 1993 at present prices.

"Just like calculators, whose prices dropped to a fraction of what they were, pagers will become more sophisticated and less expensive," Mr. Stroup says. "It's the ability to put more intelligence on a chip, mass produce it, increase its storage capacity, and at the same time decrease its price." Tarnished image

But the pager's low price does bring with it some problems. Although a diverse subscriber base has been largely beneficial for profits, the industry's image has been tarnished somewhat by the perception that beepers are often used by people illegally selling drugs.

"Carriers are required to provide services to anyone who can pay," Stroup says. "So we've had to work with law enforcement agencies and have set up a task force to try to address this problem. These people make up a very small percentage of the subscriber base, but they are bad users and often steal [airwave] time."

Also, as the industry targets younger subscribers, many schools are having to ban beepers from the classroom.

Wireless products are a mainstay of younger people's lifestyles, says Robert Karalis, general manager of Message Center Beepers, a paging company in Brighton, Mass. "Many kids have never seen their parents without a beeper," he says. "It's not anything [paging] companies have specifically done to target kids. It's just a familiar issue for them."

The majority of Message Center Beeper's growth has occurred over the past three years, Mr. Karalis says. With lower prices and the company's entry into "non-traditional markets," including parents, children, and older people, "the utility of this product exploded," he says.